The current chip on the iPod Touch is the A5, the best chip that Apple had in 2012. That chip was in the iPhone 4s which was released the same year. Since then, Apple has released several newer chips including the A6 which was created for the iPhone 5 and is still used on its iPhone 5c models.

Apple Insider said the latest rumor points towards Apple using the A6 chip or opting to go with the newer 64-bit A7 chip. The source said the upcoming iPod Touch model would have a 4-inch screen which is also present in the current model.

Along with the improved chip, the next iPod Touch is expected to feature up to 128 GB of storage. Its front FaceTime camera and rear facing 5 megapixel camera could also be upgraded.

The last time the company discussed iPod sales figures was in 2014 when it stated that it had sold 2.6 million devices in the fourth quarter.

Last year Apple purchased the Beats headphone manufacturer. This showed that the company wants to bring the top-rated technology and headphone into the rest of it product line-up and to its iPod range.